'An Ability to Execute Ideas Is Severely Lacking'

NEW YORK (AdAge.com) -- Sarah Fay took over as CEO of Carat this summer, when it was announced that media agency Carat USA would merge with its interactive shop, Carat Fusion. Previously, Ms. Fay worked as the president of Isobar USA, Carat parent Aegis' network of digital shops. She also founded Carat Interactive in 2001.
Sarah Fay
Ms. Fay talked with Advertising Age's MediaWorks about the merger and its implications for the industry.

MediaWorks: It's been a little over a month since you announced the merger. How is it going so far?

Sarah Fay: So far, so good. Scott [Sorokin, president of Carat] and I are still in the process of getting our arms around both sides of the business. We're bringing the P&Ls together -- that will be formal by 2008. We have task forces of people meeting on the key areas of the business and it's starting to take shape. The company is going to become aligned on key issues like, How do we alter our service model? How do we structure around our clients? What do the finances of the new organization look like? What are our key messages? ... The [merger] has been incredibly well-received by the clients.

MediaWorks: How will the merger benefit clients?

Ms. Fay: It's really all good news for clients, because what we are telling them is, the key person who runs relationships for you, that person is going to be someone you can talk to about all aspects of the business. We are truly taking a holistic view of our clients' businesses. We have to be able to talk about their business challenges and how can we solve them as their partners, and it's harder to do when it's two conversations. It has to be one conversation.

MediaWorks: Will the merger improve your research capabilities for clients on the traditional side?

Ms. Fay: Well, absolutely. The insights part of the organization needs to be the hub, and we'll be focusing a lot on this area of the company and making sure that it is strong and that is has all the elements we need, and that we are taking a review of the whole market, not traditional alone. Because when you look at the consumer, the consumer doesn't distinguish between online and offline. ... I think we already do take somewhat of a holistic view of the consumer, because we are all about understanding patterns of behavior, but obviously we will now have all of the interactive tools at our disposal.

MediaWorks: Do you believe this merger is the future for media agencies?

Ms. Fay: It's hard for me to comment on what the other media agencies are going to do. But I have heard from people out in the market that this is being widely talked about. It's likely that competitors will restructure in a similar fashion. The difficulty is that many of our competitors are not just two different P&Ls, but two different brands. They are completely different companies. At least what Carat has going for it is that this is an evolution of something that's been progressing every year into a better form of integration, and this is the last step to make it a single P&L. The model makes sense to a lot of people and a lot of people will want to restructure to bring digital closer to traditional. ... I just don't know how easy it is going to be.

MediaWorks: What's one of the biggest challenges facing the media industry right now?

Ms. Fay: The disaggregation of creative and media.

MediaWorks: Why?

Ms. Fay: If the media agency is moving into a more strategic position with communications and planning [for] a client, communications planning is actually very prescriptive about the tonality of message, the venues where you should encounter the consumer, the ways you should encounter the consumer. And now we really even have to ask the question: What do we want the consumer to do? So we're already kind of at a point where we're setting the stage for the creative message to happen, and there are definitely situations where, if we worked hand and hand with a creative agency, it can ... play out beautifully. But sometimes there is a disconnect that happens from the strategy to the overall execution. Certainly in digital we've seen this issue for a long time, which is why we developed a full set of digital capabilities. The client's biggest problem in digital is that there are a world of ideas out there in terms of great things that can happen in the digital space, but the ability to execute ideas is severely lacking.

MediaWorks: Do you see agencies reversing unbundling in the future? What's the solution?

Ms. Fay: We are media savvy and we have media at the center, and that drives the experience for the consumer, but it is just as important how that program plays out. To give you an example, [communications] planning provides the blueprint for the consumer experience, and in many cases we want the experience to begin in offline because we know that we can make an impact through TV or outdoors, cinema and print, and then we want to drive that consumer to have an experience in another way and we'll use digital for that. It may be mobile that becomes an interaction point with outdoor, or it may be online or search that becomes an experience with TV. But in order for those things to happen, or in order to maximize the experiences, we have to drive how the messaging directs the consumer through that program. Certainly this can be executed through a creative partner, but even creative partners are using a production model. So at some point, what's the difference between us producing or them producing?

MediaWorks: Do you see attracting new talent as an issue in the media industry?

Ms. Fay: Well, talent is definitely a challenge these days because in the digital space it's a hot market, it's a growing market, and there is only a small pool of professionals that are fully trained in the market. So in a lot of cases, we are training people who did not have previous digital experience. We are bringing them in at the ground level. Maybe hiring more than we normally would and making sure that we build an army -- grow our own, so to speak. We are doing everything we can to become an attraction for the real talent. This merger has had a lot of appeal to some pretty significant players out there that we've started hearing from proactively.